SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 16, 2001
THE KRYSTAL COMPANY
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(Exact name of registrant as specified in its charter)
Tennessee 0-20040 62-0264140
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(State of (Commission File No.) (IRS Employer
incorporation) Identification No.)
One Union Square, Chattanooga, Tennessee 37402
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(Address of principal executive offices, including zip code)
(423) 757-1550
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(Registrant's telephone number, including area code)
Item 5. Other Events and Regulation FD Disclosure.
On November 16, 2001, The Krystal Company (the "Company") announced that
it has commenced a "Modified Dutch Auction" tender offer for up to $30,000,000
aggregate principal amount of its outstanding 10.25% Senior Notes due 2007.
Item 7. Financial Statements and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
No. Description
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99 Press Release of the Company dated November 16, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
November 20, 2001 THE KRYSTAL COMPANY
/s/ Larry D. Bentley
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Larry D. Bentley
Vice President and
Chief Financial Officer
EXHIBIT 99
Press Release Dated November 16, 2001
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THE KRYSTAL COMPANY ANNOUNCES
'MODIFIED DUTCH AUCTION' TENDER OFFER
FOR A PORTION OF ITS 10.25% SENIOR NOTES DUE 2007
Chattanooga, TN, November 16, 2001 /BusinessWire/ -- The Krystal Company
(the "Company") announced today that it has commenced a "Modified Dutch
Auction" tender offer for up to $30,000,000 aggregate principal amount of its
outstanding 10.25% Senior Notes due 2007.
The Company is inviting holders to submit offers to sell notes, at a price
determined by each holder, within a range of $600 to $650 per $1,000 principal
amount upon the terms and conditions specified in the Invitation dated
November 16, 2001. Holders whose notes are accepted for purchase will also
receive accrued and unpaid interest upon consummation of the tender offer.
The tender offer will expire at 5:00 p.m., New York City time, on
December 17, 2001, unless extended or earlier terminated (the "Expiration
Date"). Tenders of notes may be made or withdrawn at any time prior to the
Expiration Date. There is no condition that a minimum principal amount of
notes be offered for sale pursuant to the Invitation.
The Company is making the tender offer by way of a "Modified Dutch
Auction" procedure. Under this procedure, the Company will accept notes
offered for sale in the following order: first, offers to sell notes which do
not specify an offer price or which specify a price of $600 per $1,000
principal amount and continuing with offers to sell notes in order of
increasing offer price until the Company has accepted $30 million aggregate
principal amount of Notes (excluding accrued interest). The Company will pay
to all holders whose offers are accepted the highest price offered for notes
that are accepted for purchase by the Company (the "Clearing Price"), even if
that price is higher than the price offered by such holder. If the aggregate
principal amount of notes offered at the Clearing Price exceeds $30 million,
acceptances of offers at the Clearing Price will be allocated among holders
on a pro rata basis according to the principal amount so offered. Notes
tendered above the Clearing Price will not be accepted.
The Company intends to finance the purchase of notes through a sale and
leaseback transaction involving a total of approximately 38 of its restaurant
properties. The Company's obligation to purchase notes pursuant to the
Invitation is subject to, among other things, the availability of sufficient
funds to consummate the purchase of notes offered for sale and the obtaining
of a new senior credit facility on terms acceptable to the Company. The
Company has not obtained any firm commitments related to the sale and
leaseback transaction or new credit facility, and there can be no assurance
that any such commitments will be obtained in the future.
The terms and conditions of the tender offer are set forth in the
Company's Invitation dated November 16, 2001. This press release is not an
offer to purchase, a solicitation of an offer to purchase or a solicitation of
an offer to sell any notes. The offer may only be made pursuant to the terms
of the Invitation and related Letter of Transmittal.
Banc of America Securities LLC is the exclusive dealer manager, SunTrust
Bank is the depositary, and D.F. King & Co., Inc. is the information agent in
connection with the tender offer. Copies of the Invitation and related offer
documents may be obtained from the information agent at 212-269-5550 or
800-488-8095 (toll free). Additional information concerning the terms of the
tender offer may be obtained by contacting Banc of America Securities LLC at
888-292-0070 (toll free) or 704-388-4813 (collect).
About the Company
The Company develops, operates and franchises full-size Krystal and
smaller "double drive-thru" Krystal Kwik quick-service restaurants. The
Company has been in the quick service restaurant business since 1932, and
believes it is among the first fast food restaurant chains in the country.
The Company began to franchise Krystal Kwik restaurants in 1990 and Krystal
restaurants in 1991. In 1995, the Company began to develop and franchise
Krystal restaurants located in non-traditional locations such as convenience
stores. As of September 30, 2001, the Company operated 247 units in eight
states in the southeastern United States. Franchisees operated 155 units as
of September 30, 2001.
Statement Concerning Forward-Looking Information
Certain written and oral statements made by or on behalf of the Company
may constitute "forward-looking" statements as defined under the Private
Securities Litigation Reform Act of 1995 (the "PSLRA"). The PSLRA contains a
safe harbor in making such disclosures. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from the Company's historical experience and its present
expectations or projections. These risks and uncertainties include, but are
not limited to, unanticipated economic changes, interest rate movements,
changes in governmental policies, the impact of competition, changes in
consumer tastes, increases in costs for food and/or labor, the availability
and adequate supply of hourly-paid employees, the ability of the Company to
attract and retain suitable franchisees, the Company's ability to obtain
funding sufficient to meet operation requirements and capital expenditures
(including the consummation of the sale-lease back transaction and the
availability of a new senior credit facility), the impact of governmental
regulations and other risks and uncertainties described in the Company's
Securities and Exchange Commission filings. The Company cautions that such
factors are not exclusive. Caution should be taken not to place undue
reliance on any such forward-looking statements since such statements speak
only as of the date of the making of such statements and are based on certain
expectations and estimates of the Company which are subject to risks and
changes in circumstances that are not within the Company's control. The
Company does not undertake to update forward-looking statements.